152 KA1J1L> PUPULATIO interpret the sensitivity of measured income in a community arrangements, labor force participation, and schooling pattern real income phenomenon. More fundamentally, the valuable r son commands is his time; its free allocation between market a activities, between consumption and investment, between his m of his children should not be interpreted as conclusive evidenc welfare or in the real value of personal incomes, though it ma; surable flows of goods and services that are usually construed as To simplify and avoid problems that arise when the individ is adopted in such an analysis, I find it useful to regard the integrated decision-making unit with a unified, if not egalitari; of its own welfare. One might assume that parents behave a; sought to increase the income, or wealth, of parents and chile erational-family net worth in physical and human capital) : constraints of necessary and desired paths of consumption for t time. However, desired paths of consumption and the weighl parents to the wealth position of present versus future generati systematically among individuals and account for differences i: behavior. For example, poor parents may not be motivated to tive) wealth bequest to their offspring. On the contrary, their children may be to borrow from them and have them more t: themselves during the parents' own lifetime. Only recently trialized countries has the state actively taken the side of sharply curtailed the parents' power to exploit the child.t A *Thc classic statement of consumer decision theory interpreted as i time is Becker's (10). Efforts to reinterpret the character and strut economic growth from this perspective are as yet limited (11), but empirical work in this direction is beginning (2, 12). tTo define child exploitation one must distinguish between private and child) and social welfare. First, consider why parents might invcs private optimal amount in the development of each of their children-th they not invest until the private marginal return to additional human in the equilibrium rate of return in the society? Two reasons are clear cannot hold enforceable claims on the increment to their offspring's capacity that are due to the human capital formation the parents might parents may not expect to outlive their children and to be able to increments to their child's future productive capacity. Therefore, par investing less in their children and work them more than would appc optimal (or optimal from the child's point of view). Were a perfec extended to the rational child, he would presumably be willing to borro rium rate of interest in the society and buy back from his parents his tii his future productive capacity. Although this institutional arrangement ful, child labor and truancy laws, and, more recently, subsidized stuc legal mechanisms to redress this institutional shortcoming of the famil; of view of society's long-run welfare.ive the relationship, then one might argue the nonpecuniary returns to additional children had become strongly negative.